Oil prices little changed, on track for third straight weekly gain

A pump jack operates in front of a drilling rig at sunset in an oil field in Midland, Texas U.S.

Oil prices were little changed on Friday, on track for a third consecutive weekly rise, but demand concerns stemming from surging coronavirus cases and renewed lockdowns in several countries capped any further gains.

The likelihood of an effective COVID-19 vaccine and hopes that OPEC and its allies would keep production under check have bolstered the oil markets this week. 

Brent crude (LCOc1)  futures were up 5 cents, or 0.1% to $44.25 a barrel at 0505 GMT. 

The more active U.S. West Texas Intermediate (WTI) crude contract (CLc2) remained unchanged at $41.90 a barrel. The WTI contract for November (CLc1) , which expires on Friday, was also flat at $41.74 per barrel.

Both benchmarks are up over 3% so far this week, the slimmest weekly gains in the last three weeks. 

The oil markets have trimmed their weekly gains “as virus surge throws a wet blanket over vaccine optimism,” said Stephen Innes, chief global market strategist at Axi. 

“But it is all down to OPEC. No formal decision will be taken before the full OPEC+ ministerial meeting at the end of this month.” 

OPEC+, a grouping that includes the Organization of the Petroleum Exporting Countries (OPEC), Russia and other producers, will discuss its output policy at a meeting on Nov. 30 and Dec. 1. 

Although the persistent rise in COVID-19 cases continues to cast doubts on demand recovery, Brent spreads in 2021 have narrowed significantly as demand from Asia has been strong and markets remained hopeful that OPEC and its allies could extend their output cuts. 

Oil prices were also supported by signs of movement on a stimulus deal in Washington. 

U.S. Senate Republican Majority Leader Mitch McConnell agreed to resume discussions on providing more COVID-19 relief as cases surge across the United States, Democratic leader Chuck Schumer said on Thursday, according to CNBC. “Any stimulus deal done before the holidays will help keep crude prices stay near the upper boundaries of its recent trading range,” said Edward Moya, senior market analyst at OANDA.

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